VINACHEM

The ICIS Northwest Europe ammonia-to-hydrogen assessment continued its recent bullish trend, gaining in value for the twelfth straight week as ammonia pricing is still finding support.

The ammonia-to-hydrogen assessment only rose week on week by a mere €0.02/kg to hit €5.67/kg on 5 October, the highest valuation for the contract since early March.

The ammonia-to-hydrogen assessment reflects the cost of importing fossil-based ammonia to northwest Europe and then decomposing that ammonia into hydrogen. The ammonia price referenced is the ICIS CFR Northwest Europe Duty Unpaid assessment, published every working Thursday.

Low carbon hydrogen produced via steam methane reforming (SMR) with carbon capture and storage (CCS) attached using month-ahead Dutch gas extended its discount to the ammonia-to-hydrogen equivalent to €2.36/kg after a fall of €0.19/kg on the week to €3.31/kg.

Baseload electrolysis using Dutch front-month power prices increased at a faster rate than the ammonia-to-hydrogen peer, but the weekly move was largely similar at a small boost of €0.05/kg to come in at €6.46/kg.

AMMONIA MARKET

The ammonia market has continued to see prices being supported as availability continues to be tight.

In Europe, producers are bullish following the increase in the Tampa October contract price, but buyers are not willing to pay above $600/tonne CFR. European production cost is heard below $500/tonne CFR.

Middle-Eastern ammonia producers are said to have no spot availability for October but Asian demand for ammonia is subdued.

In the US, activity is low due to the ongoing harvest, but production out of Trinidad is stable after recent natural gas supply issues.

GAS MARKET

The ICIS Dutch TTF November ’23 contract was in bearish mood at the beginning of the Winter ’23 delivery period, falling from trading around the €39/MWh mark on 2 October to €36/MWh on 5 October, the lowest value for the contract since early 2022.

Market participants unwound long positions on the back of warm temperature forecasts for the majority of Europe for the first half of October, limiting demand expectations and allowing for gas to continue to be pumped into storage reservoirs ahead of the start of the withdrawal season next month.

Data from ICIS showed that European gas demand averaged 7.8TWh/day for the first five days of October this year compared to the 8.5TWh/day average for the 1-5 October 2022 period.  – ICIS –